International Marketing Quiz 2 Practice

Which of the following arguments in favor of protectionism do economists support?

-strengthening national defense -protecting infant industries -industrializing underdeveloped nations

Which of the following issues and laws were addressed in the export expansion section of the Omnibus Trade and Competitiveness Act?

-the Foreign Corrupt Practices Act -promotion of exports -export controls

Which of the following are objectives of the World Bank Group?

-to improve standards of living -to reduce poverty -to promote sustainable growth

True or false: The World Trade Organization (WTO) has strict means of enforcing decisions that are made by the panel of experts.

False

A government can accomplish currency blockage by

not allowing importers to exchange their national currency for the sellers' currency.

After World War II, the United States helped build new markets and strengthen the economies of noncommunist countries by

offering financial assistance.

A country resorts to protectionism in order to

prevent foreign companies from intruding on domestic markets.

With increasing competition in world markets, there is growing tendency to adopt ______.

protectionism

The limit that a government places on imports in terms of number of units or dollar amounts is called a(n)

quota

Countries use import licenses to

regulate the flow and amount of imported goods.

Violators are assessed antidumping duties when

goods are sold in a market below cost

Balance-of-payment statements are mainly used by

government agencies.

The United States spread the ideal of capitalism worldwide after World War II in order to

hinder the spread of communism.

International trade patterns were disrupted in the last half of the twentieth century because of the

ideological split between countries with a socialist Marxist approach and those with a democratic capitalist approach.

Antidumping laws

keep out certain imports.

Trade barriers are primarily encouraged by

local industries.

Trade treaties before the General Agreement on Tariffs and Trade tended to

raise barriers.

A deficit results on a country's balance-of-payments statement when

receipts are less than international payments.

The International Monetary Fund was formed so that

unstable currencies would not become barriers to trade.

Voluntary export restraints (VERs) impose restrictions on the

volume of exports.

The Omnibus Trade and Competitiveness Act is designed to

-help businesses increase their international competitiveness -deal effectively with trade deficits -handle what appear to be unjust trading practices

Which of the following services are performed by institutions under the World Bank Group?

-helping to settle disputes between governments and foreign investors -providing investors with investment guarantees against noncommercial risk -lending money to strengthen the private sector of developing countries

To impede the entry of unwanted goods into its markets, countries commonly impose which of the following types of barriers?

-legal -psychological -exchange

Which of the following are nontariff barriers?

-market barriers -quotas -monetary barriers -boycotts

A deficit on a country's balance-of-payments statement can be reduced or eliminated when

-the country's expenditures decrease in other countries. -the country's international receipts increase.

Which of the following are means by which governments create barriers to currency exchange?

-the rate of exchange -rules regarding how quickly exchanged currency can be used -the amount of exchange

Which of the following are reasons for imposing certain nontariff barriers to trade?

-to ensure safety -to protect health -to safeguard product quality

Which of the following are reasons that protectionists want government to impose restrictions on trade?

-to maintain the standard of living -to protect natural resources -to keep up employment and reduce unemployment

What were the purposes of making improvements in rules and procedures in certain areas in the Uruguay Round agreement?

-to make them predictable -to make them equitable -to make them open

Which of the following are reasons the import relief section of the Omnibus Trade and Competitiveness Act was created?

-to reduce competitive pressure -to combat severe financial harm -to compensate loss of market share

Which of the following are objectives of the International Monetary Fund?

-to stabilize foreign exchange rates -to establish freely convertible currencies -to help expand international trade

Money constantly flows into and out of a country in which of the following ways?

-when a country exports and imports products and services -when a country receives cash receipts or makes cash payments -when countries exchange monetary gifts -when a country makes foreign investments

In the context of controlling imports, which of the following is a true statement about an import license?

It can be used to restrict imports on a case-by-case basis.

Which of the following statements is true about the General Agreement on Tariffs and Trade?

It created a forum in which member countries could seek lower tariffs for their products.

Which of the following statements about the original General Agreement on Tariffs and Trade is true?

It created an agency to oversee international business transactions.

The U.S. program to help Europe rebuild after World War II was the

Marshall Plan.

True or false: A voluntary export restraint is called "voluntary" because limits on the volume of exported goods are set by the exporting country.

True

True or false: Sometimes trade can be restricted by using standards.

True

The international financial transactions of a nation are recorded by a system of accounts. This system of accounts is known as the

balance of payments

The complete restriction that a government places on buying or bringing in specific goods from another country is called a

boycott

A political dispute arises between the governments of two trading countries, Ataya and Hembark. Consequently, the government of Ataya decides to restrict the import of goods from Hembark and sever all trading relations with it. In this scenario, Atava's decision is an example of a government

boycott.

Negotiations of trade treaties were historically made on a ______ basis.

bilateral

Which of the following are receipts (the plus side) on the U.S. balance-of-payments statement?

-payments of interest and dividends on investments abroad -export sales of merchandise -foreign government payments to the United States

Which of the following barriers impede market access?

-restrictive technical standards -restrictive licensing requirements -customs barriers -tariffs and quotas

Match the various kinds of floats (in the left column) with their corresponding descriptions (in the right column).

Clean Float - Countries are not permitted to manipulate currencies Dirty Float - Countries are permitted to manipulate currencies

Which of the following statements about tariffs is true?

They are arbitrary.

The General Agreement on Tariffs and Trade became a part of the World Trade Organization with the ratification of the

Uruguay Round agreements.

The World Trade Organization was created following the signing of the

Uruguay Round trade agreement.

The General Agreement on Tariffs and Trade was signed by the United States and 22 other countries in the years immediately following

World War II.

The issue of how open foreign markets are for the entry of U.S. goods is addressed by way of market

access

Which of the following refers to the situation in which a country does not allow goods or services to be exported to a specified country?

an embargo

The country of Cileria refuses to sell goods to its neighboring country Isotola after a series of armed border clashes with Isotola troops. In this scenario, Cileria's decision is an example of

an embargo.

If imports economically harm a U.S. company even though the imports are fairly priced, the company can

ask the government for temporary relief.

The government of a nation imposes a tax on goods that enter its borders. This tax is known as a(n)

tariff.

In the context of a nation's balance-of-payments statement, which account is primarily of interest to international business?

the current account

The monetary barrier of blocked currency is used for which of the following purposes?

to help protect a balance-of-payments position

Since World War II, the institutions under the World Bank Group have been instrumental in the expansion of international

trade

Which of the following enabled U.S. companies to expand exports and investment worldwide following World War II?

-growing consumer and industrial markets -a rise in standards of living

Which of the following led to the creation of new global marketing opportunities?

-Countries that were previously underdeveloped and economies that were war-torn grew rapidly. -Economic cooperation and assistance developed at a large scale.

Which of the following are results of the trade barriers that governments set up?

-Development of domestic industry is encouraged. -Existing industry is protected.

Which of the following are consequences of imposing tariffs?

-Government control in economic matters becomes greater. -International relations are weakened. -The sources of supply for manufacturers become restricted.

Which of the following statements about the World Trade Organization are accurate?

-It encompasses the structure of GATT. -It is an institution. -It issues binding decisions on members.

Which of the following are accurate statements about a nation's balance-of-payments statement?

-It records all financial transactions between residents and the rest of the world. -It maintains records through a double-entry bookkeeping system.

Which of the following are accurate statements about the General Agreement on Trade in Services?

-It sought to make additional changes in opening up the telecommunications and financial services sectors. -It set up procedures concerning business and investment.

Which of the following are accurate statements about a quota?

-It tends to raise prices. -It places an absolute limit on imported items.

Which of the following are typical reasons for exchange-control restrictions enacted by a government?

-Particular industries are encouraged. -Balance-of-payments positions are preserved.

Which of the following are elements of the General Agreement on Tariffs and Trade?

-Problems in global trade will be solved through consultation. -Trade will be nondiscriminatory. -Customs tariffs can be used to protect domestic industries.

Which of the following are correct statements about tariffs?

-Tariffs help generate government revenue. -Tariffs are based on quantity or value of goods. -Tariffs tend to discourage the importation of goods.

Which of the following show that the World Trade Organization has gained acceptance by the trading community?

-The WTO has conducted successful negotiations to open markets in information technology and telecommunication. -More than 60 countries have joined the WTO. -The WTO has actively settled trade disputes.

In the context of a nation's balance-of-payments statement, which of the following reasons explain why the current account is of particular interest to international business?

-The account records the value of all imported and exported merchandise and services. -The account shows all payments and receipts from investments and overseas employment.

Which of the following are problems associated with a government requirement that exchange amounts be on deposit for a period of time prior to the date goods are imported?

-The value of the funds can be reduced by inflation. -The practice tends to raise the price of the imported goods. -The Importer does not have use of the funds for other business purposes.

Which of the following are features of international trade in the twenty-first century? (Select all that apply.)

-There are greater opportunities for international trade. -Countries are more interdependent economically.

In which of the following areas was improvement made in the Uruguay Round agreement?

-antidumping -valuation of customs -rules of origin -safeguards and standards

Which of the following are types of exchange-control restrictions?

-blocking currency -government approval for foreign exchange

Which of the following are international investments (the minus side) on the U.S. balance-of-payments statement?

-cost of foreign military and economic aid -cost of goods that are imported -new overseas investments -money spent by U.S. tourists overseas

Which of the following can be presented before a panel of experts selected by the World Trade Organization?

-disputes related to quotas for raw materials -issues related to foods that are genetically modified -matters regarding country-of-origin labeling

Which of the following are crucial for U.S. trade, according to the Omnibus Trade and Competitiveness Act?

-expansion of exports -access to market -import relief

Which features of the Omnibus Trade and Competitiveness Act have helped to improve export trade?

-filing and tracking of export license requests using computer-based procedures -access to trade data through the National Trade Data Bank

Match the types of accounts in a balance-of-payments statement (in the left column) with the items they contain (in the right column).

Current Account-unilateral transfers of funds; merchandise imports, exports; services Capital Account- short-term capital movements; portfolio investment; direct investment short-term capital movements; portfolio investment; direct investment Reserves Account-increases or decreases in foreign exchange; increases or decreases in liabilities to foreign central banks

A country signs the the General Agreement on Tariffs and Trade and becomes a member. In doing so, the country agrees to which of the following?

The country will use consultation in resolving global trade issues.

How many accounts are included in a balance-of-payments statement?

Three

An ever-expanding variety of goods and services are in demand by consumers all around the world. Given the importance of world trade, countries are inclined to

attempt to control the trade for their own benefit.

A country wants to maintain a record of its direct investment. The entry should be made in the ______ account.

capital

An objective of the General Agreement on Trade in Services (GATS) is to

eliminate barriers that discriminate against foreign services.

The World Trade Organization has achieved success by

engaging in continuous discussions to resolve issues that hinder trade.

A country's balance-of-payments statement serves which of the following purposes?

evaluating the country's international economic position

International trade contracts are commonly written in terms of special drawing rights because ______ do not usually affect special drawing rights.

exchange-rate fluctuations

When there is ______ among countries, financial transactions take place between businesses or consumers of the countries.

trade

The Omnibus Trade and Competitiveness Act directs that

trading partners must be dealt with on the basis of how they actually act.